Moody’s cuts Digicel, rates notes Caa2

Moody's Investors Service said it downgraded Digicel Group Ltd.'s corporate family rating to Caa1 from B2.

Digicel Group’s senior unsecured debt instruments were downgraded to Caa3 (LGD5) from Caa1 (LGD5), Digicel Ltd.’s senior unsecured debt instruments were downgraded to B3 (LGD3) from B1 (LGD3) and Digicel International Finance Ltd.’s senior secured bank credit facility was downgraded to B1 (LGD1) from Ba2 (LGD1).

The downgrade follows Digicel’s announcement of an offer to exchange its outstanding 2020 and 2022 notes for new 2022 and 2024 bonds and reflects the company's untenable capital structure, the agency said.

Moody's assigned a rating of Caa2 to the new senior unsecured notes due 2022 and 2024.

The agency said it will consider the exchange offer as a distressed exchange, which is a default under its definition, and therefore downgraded Digicel's probability of default rating to Caa3-PD.

The outlook is stable.

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